Nano Dimension’s Earnings Call: Growth Amid Challenges

Nano Dimension Ltd ((NNDM)) has held its Q2 earnings call. Read on for the main highlights of the call.

Nano Dimension Ltd’s recent earnings call revealed a mixed sentiment, reflecting both optimism and challenges. The company showcased significant revenue growth, primarily driven by the acquisition of Markforged and strategic partnerships. However, issues such as the bankruptcy of Desktop Metal and a decline in revenue excluding Markforged indicate ongoing challenges. Despite these hurdles, Nano Dimension’s strong financial position provides strategic flexibility, though macroeconomic headwinds and increased operating expenses remain concerns.

Strong Revenue Growth

The company reported a robust revenue of $25.8 million for the quarter, marking a year-over-year growth of approximately 72% compared to $15 million in the second quarter of 2024. This impressive growth underscores the positive impact of strategic decisions and acquisitions.

Successful Acquisition Integration

The integration of Markforged is on track, contributing $16.1 million in revenue. This acquisition is not only boosting revenue but also aligning operations to identify synergies, which is crucial for future growth.

Strategic Partnerships and Orders

Nano Dimension completed a significant defense order valued at approximately $3 million and expanded its partnership with Nestle to deploy Markforged systems across multiple U.K. sites, highlighting the company’s strategic focus on strengthening partnerships.

Strong Financial Position

The company ended the quarter with a solid financial footing, holding $551 million in total cash, cash equivalents, and investable securities. This financial strength provides the company with the flexibility to pursue strategic options.

Desktop Metal Bankruptcy

Following a thorough review, Desktop Metal filed for Chapter 11 bankruptcy protection. This led to a noncash impairment of $139.4 million and a loss from its operation of $30.4 million during the quarter, posing a significant challenge for the company.

Revenue Decline Excluding Markforged

Excluding the contribution from Markforged, the company’s revenue was $9.7 million for the quarter, representing a 35% year-over-year decline. This decline reflects strategic divestitures and macroeconomic headwinds.

Decreased Gross Margin

The gross margin decreased to 44.7% from 46.1% in the previous year, driven by lower revenue volumes and product mix. The GAAP gross margin further dropped to 27.3% due to the amortization of the fair value step-up of acquired Markforged inventory.

Increased Operating Expenses

Operating expenses for the quarter rose to $28.2 million, higher than the prior year due to combined operations with Markforged. This increase led to an adjusted EBITDA loss of $16.7 million, compared to a $14.6 million loss last year.

Forward-Looking Guidance

During the earnings call, Nano Dimension provided guidance that highlighted several key metrics. The company expects continued revenue growth, driven by the Markforged acquisition, despite a 35% year-over-year decline in revenue excluding Markforged due to strategic divestitures and macroeconomic challenges. The gross margin is expected to remain under pressure due to lower revenue volumes and product mix changes. Operating expenses are anticipated to remain elevated with the inclusion of Markforged, although Nano Dimension’s standalone operating expenses have decreased significantly year-over-year.

In summary, Nano Dimension’s earnings call presented a balanced view of its current position. While the company is experiencing significant revenue growth and successful integration of acquisitions, challenges such as the Desktop Metal bankruptcy and revenue declines excluding Markforged persist. Nevertheless, the company’s strong financial position offers a buffer against these challenges, and strategic partnerships continue to be a focal point for future growth.